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Two lawsuits filed last week by federal regulators suggest that if employers act unilaterally to exclude all job applicants who have criminal records, without regard to recent guidelines laid out by the Equal Employment Opportunity Commission, they could be opening themselves up to charges of race discrimination. Employers can’t turn away potential employees simply because of a long-ago conviction for mortgage fraud, for instance, if they are hoping to work in an auto warehouse, or a drug charge if they are applying to be a store cashier.

In complaints filed in federal courts in Illinois and South Carolina, the EEOC says that discount retailer Corp. and a U.S. division of German automaker BMW, turned away new hires based on criminal background checks, when they should have considered each applicant individually and evaluated whether his or her past arrest or crime had any bearing on the job for which they applied. The EEOC is charging that the hiring policies at both companies had the effect of discriminating against black applicants, in violation of Title VII of the 1964 Civil Rights Act, which bars employers from discriminating based on race.

More than two thirds (69%) of employers run criminal background checks on all of their potential employees according to a 2012 survey by the Society of Human Resource Management. At the same time, the number of Americans with criminal records has escalated dramatically in recent years. According to the 2013 testimony of a Justice Department official, a startling one in three Americans has some sort of criminal record, which often includes an arrest that didn’t lead to a conviction, a conviction that didn’t result in jail time or a conviction for a non-violent crime. Yet often these records are swept into over-broad background checks that then exclude applicants from jobs.

When it comes to incarceration rates, black men are imprisoned at six times the rate of white men, according to 2011 figures gathered by the federal Bureau of Justice Statistics.

Last year a unit of PepsiCo settled discrimination charges brought by the EEOC, agreeing to pay a $3.1 million fine and to change its screening policy after it was charged with discriminating against African-Americans by using criminal background checks, in some cases barring applicants who had been arrested but not convicted. Shortly after the Pepsi settlement the EEOC issued the new guidelines.

While the guidelines sanction the use of background checks, they remind employers they must use a three-pronged test laid out by the Supreme Court in a landmark 1975 ruling called Green v. Missouri Pacific Railroad: Employers must consider the nature of the crime, its relation to the potential job, and the time that has passed since the offense. The EEOC guidelines also say that employers must give applicants the chance to explain the circumstances of their criminal records, including information about whether they already proved they could do the same sort of work for which they’re applying, and whether they had gotten rehabilitation services or other training.

In the BMW case, employees had been working for a company that staffed a BMW warehouse. When BMW switched companies, the staff had to re-apply and 69 African-Americans were excluded because they failed the criminal background check. One who lost her job had been working for BMW for 14 years but had a 1990 misdemeanor assault conviction for which she had paid a $137 fine, according to the complaint. The suit says that many of the workers who didn’t get rehired “had been working at the BMW facility for several years without incident.”According to the suit, 55% of the plant workers were African-Americans but 80% of those who didn’t get their jobs back were black.

In an email statement, BMW spokesman Kenn Sparks said, “We cannot comment on the specifics of the EEOC complaint because of the pending litigation. However, BMW believes that it has complied with the letter and spirit of the law and will defend itself against the EEOC’s allegations of race discrimination.”

In the suit against Dolgencorp., which does business as Dollar General, the EEOC is challenging a policy that requires applicants to go through a background check after they have gotten a job offer. As many employers do, the security check company, General Information Systems, put together a matrix where certain combinations of offenses and time frames would mean that Dollar General would take back its job offer. Like BMW’s policy, Dollar General’s didn’t allow individual applicants to argue that they were fit to do the job, despite their criminal record. The EEOC notes that 10% of black applicants had their offers taken back while only 7% of nonblack applicants did.

“Dollar General’s criminal background check process is structured to foster a safe and healthy environment for its employees, its customers, and to protect its assets in a lawful, reasonable and non-discriminatory manner,” Dollar General said in a statement.

This morning my colleague Daniel Fisher published an opinion piece about the EEOC case by two partners in the Washington, D.C. office of the law firm Jones, Day. The authors are Michael Carvin, who worked as Deputy Assistant Attorney General for Civil Rights in the Justice Department under President Reagan and Eric Dreiband, General Counsel of the EEOC under President George W. Bush. The piece argues that employers should be able to do broad criminal background checks and shouldn’t be blamed for racial inequalities that are built into the system. “[D]ue to factors wholly beyond any employer’s control, there are statistical differences in the rate of criminal convictions between various races,” they write. They also argue that a private employer should be able to “exclude risky criminals from its workforce because employers may be ultimately liable, under principles of vicarious liability, for the work-related misconduct of their employees.” They call the EEOC’s policy a “Catch 22.” Employers “must either hire criminals or risk an EEOC investigation and class action lawsuit.”

But there are several problems with Carvin and Dreiband’s argument. If someone was charged with murder or larceny but never brought to trial, he still has a criminal record. What if he is innocent? Is he a criminal who deserves to be barred from a job? To be sure, there are also people who were found guilty and served time for their crimes. But once they’ve paid their debt to society, do we want to keep them permanently unemployed, particularly if their prior offense has nothing to do with the job they want? Should there be no second chances? And what about arrests or convictions for crimes like prostitution, drug possession and trespassing? Should those all be bars to employment? The EEOC guidelines make it clear that if there’s a rational reason to exclude someone with a criminal record, that is entirely legal. For instance, someone who was convicted of stealing could legally be barred from a sales position.

Sally Friedman, legal director at the Legal Action Center, a national law and policy group that fights discrimination against people with a history of drug abuse, HIV/AIDS and criminal records, notes that there are tens of millions of people with criminal records, and employers routinely deny them jobs without looking beyond the mere fact that they have some sort of criminal record. But, says Friedman, “at the same time we want these people to stay out of prison, we want them on the tax rolls, we want them to take care of their families, and yet we won’t give them a job. The law simply requires that we look at these people as individuals.” Friedman adds that it’s extremely rare for employers to be held liable for so-called “negligent hiring,” if an employee commits a crime on the job, especially if the employer did the individual assessment required by the EEOC in its guidelines.

Whether you agree with Carvin and Dreiband or with Friedman, the fact is that the government is cracking down on employers who use background checks without looking at whether the criminal record has any relevance to the job and without giving the applicant a chance to show that she or he is fit to do the work. “Employers are going to have to start looking at more legal and fair ways to evaluate job applicants with criminal records,” says Friedman. “This litigation makes it clear that broad-brush practices that automatically exclude thousands of qualified applicants will not be tolerated.”